Tesla Shareholders Reject Proposed Investment in xAI
Tesla shareholders have rejected a proposal for a $5 billion investment in Elon Musk's AI startup, xAI, despite over 1.06 billion votes in favor. The proposal failed due to 473 million abstentions counted as 'no' votes. Tesla's General Counsel indicated that the board would consider next steps, suggesting the idea may not be entirely off the table. Tesla and xAI maintain a close relationship, with shared technology and resource partnerships, and Musk's ongoing interest in integrating AI capabilities between the companies.
Tesla shareholders have voted against a proposal that would have authorized the company to invest in Elon Musk’s artificial intelligence (AI) startup, xAI.
While the proposal received over 1.06 billion votes in favour—more than those opposed—it ultimately failed due to 473 million abstentions being counted as “no” votes under Tesla’s corporate rules.
The non-binding proposal, which Musk had publicly supported, would have paved the way for a potential $5 billion investment.
A Technical Defeat, Not a Lack of Support
Under Tesla’s voting rules, abstentions are treated as votes against, turning what was technically a majority of “yes” votes into a failed proposal. The outcome surprised some investors, given that the number of direct votes supporting the measure exceeded those opposing it.
Despite the result, Tesla’s General Counsel Brandon Ehrhart said the board would “consider next steps in light of this level of shareholder support,” signaling that the idea may not be off the table entirely.
Strong Existing Ties Between Tesla and xAI
Even without a formal investment, Tesla and xAI are already closely linked. The AI company, founded by Musk in 2023, purchased nearly $200 million worth of Tesla Megapack batteries in 2024 to power its data infrastructure. Tesla has also integrated xAI’s Grok chatbot into its vehicles, highlighting a growing technological overlap between the two companies.
Musk has previously described xAI as central to his broader AI ambitions, with research aimed at creating artificial general intelligence capable of reasoning about the world. He has also argued that Tesla should participate financially to strengthen its own AI ecosystem, which powers products such as Full Self-Driving and Optimus.
For now, Tesla’s collaboration with xAI continues through shared technology and resource partnerships rather than direct investment. But with strong shareholder interest and Musk’s determination to integrate his companies’ AI capabilities, this likely won’t be the last time the idea resurfaces.
